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                            Before the
                Federal Communications Commission
                      Washington, D.C. 20554
                                 

In the Matter of                        )    File No.    EB-
02-TC-017
                              )         
Suburban Cable TV Co., Inc.             )    CUID        No.  
PA2146 (Buckingham Township)
                              )    
Complaints Regarding                    )    
Cable Programming Services Tier Rates        )    
and Petition for Reconsideration             )    


                            ORDER

     Adopted:  July 16, 2002            Released:   July 17, 
2002 

By the Chief, Enforcement Bureau:1

     1.   In  this   Order,  we  consider  a   petition  for 
reconsideration ("Petition") of Cable Services Bureau Order, 
DA  95-1227   ("Prior  Order"),2  filed  with   the  Federal 
Communications  Commission  ("Commission")   by  the  above-
referenced operator ("Operator").3   Operator also requested 
a stay  of the  Prior Order, which  was granted.4  The Prior 
Order resolved complaints filed against the rates charged by 
Operator for its cable programming services tier ("CPST") in 
the community referenced above through May14, 1994.  In the 
Prior  Order,  the Cable  Services  Bureau  stated that  its 
findings "do not  in any way prejudge  the reasonableness of 
the price for  CPS service after May 14, 1994  under our new 
rate  regulations."5   In  this  Order  we  deny  Operator's 
Petition in part, grant it  in part, modify the Prior Order, 
vacate the stay  and order the payment of  refunds.  We also 
address   the  reasonableness   of  Operator's   CPST  rates 
beginning May 15, 1994.
 
             2.     Under    the     provisions    of    the 
Communications  Act6 that  were in  effect at  the time  the 
complaints  were  filed,  the Commission  is  authorized  to 
review  the  CPST rates  of  cable  systems not  subject  to 
effective competition  to ensure that rates  charged are not 
unreasonable. The  Cable Television Consumer  Protection and 
Competition  Act  of  1992   ("1992  Cable  Act")7  and  the 
Commission's rules  required the  Commission to  review CPST 
rates upon the  filing of a valid complaint  by a subscriber 
or    local    franchising     authority    ("LFA").     The 
Telecommunications  Act  of  1996  ("1996  Act"),8  and  the 
Commission's  rules implementing  the legislation  ("Interim 
Rules"),9 required that a complaint against the CPST rate be 
filed with the  Commission by an LFA that  has received more 
than  one  subscriber  complaint.   The filing  of  a  valid 
complaint triggers an obligation  upon the cable operator to 
file a justification of its CPST rates.10  If the Commission 
finds the  rate to be  unreasonable, it shall  determine the 
correct rate and any refund liability.11 

     3.   During the  first phase  of rate  regulation, from 
September 1,  1993 until  May 15,  1994, the  benchmark rate 
analysis and comparison with an operator's actual rates were 
calculated using the FCC  Form 393.12  The benchmark formula 
was  revised,  effective  May  15, 1994.13    Systems  first 
becoming subject to rate regulation  after May 15, 1994 were 
required  to justify  their  initial  regulated rates  using 
forms in the  FCC Form 1200 series.14  Systems against which 
rate  complaints  were  still pending  when  the  Commission 
revised its  benchmark formula were required  to recalculate 
their benchmark rates as of May  15, 1994 using the FCC Form 
1200.15 Cable  operators may  justify their rates  through a 
cost of service showing using FCC Form 1220.16  In reviewing 
an  operator's FCC  Form 1220  cost of  service showing,  we 
evaluate the  operator's rate  base and expense  elements to 
determine  whether  the  operator  should  be  permitted  to 
recover those items.   Where a certain rate  base or expense 
element  is not  justified  under our  rules,  such cost  is 
disallowed in whole or in  part.17  Where reported costs are 
disallowed, we make appropriate adjustments. 

     4.   In its  Petition, Operator raises two  issues that 
have  been  addressed  in previous  orders.  Operator  first 
argues that  the Cable  Services Bureau erred  when imputing 
normalized  taxes  to  Operator's customer  equipment  costs 
prior  to unbundling  those  costs  from Operator's  service 
rates.  The Cable Services  Bureau previously addressed this 
issue at length in Suburban Cable.18  The discussion in that 
case is  directly on  point and need  not be  repeated here.  
The Cable Services Bureau  concluded that the benchmark rate 
methodology contemplates the  unbundling of normalized taxes 
and  it   would  be  arbitrary  and   inconsistent  for  the 
Commission  to build  normalized taxes  into the  pricing of 
tier offerings  and only unbundle actual  taxes attributable 
to equipment costs.  We conclude here, as the Cable Services 
Bureau did in Suburban Cable, that  it was not error for the 
Cable  Services   Bureau  to  impute  normalized   taxes  to 
Operator's  customer  equipment  costs prior  to  unbundling 
those costs from Operator's service rates.

     5.   The  second  issue  raised   by  Operator  in  its 
Petition, concerning the adjustment of its inflation factor, 
was thoroughly  addressed by the Commission  in Cencom Cable 
Income Partners ("Cencom")19 and that discussion need not be 
repeated  here.  Because  we  find that  the Cable  Services 
Bureau's action  in the Prior  Order is consistent  with the 
Commission's  holding   in  Cencom,  we   reject  Operator's 
argument.

     6.   The  third  and  final issue  raised  by  Operator 
concerns a  clerical error contained in  the channel line-up 
card provided  by Operator  for the  period reviewed  in the 
Prior Order.  Operator asserts in its Petition, and provides 
evidence  thereof, that  the  channel line-up  for the  CPST 
included 23  channels during the  FCC Form 393  time period.  
We  agree  that  a  clerical  error was  made  and  we  find 
Operator's  argument  to  be  compelling.   Upon  review  of 
Operator's FCC Form 393, including the allowance for 23 CPST 
channels,  we find  that  Operator has  justified a  maximum 
permitted rate  ("MPR") of  $10.90, rather  than the  MPR of 
$10.58 calculated in the  Prior Order.20  Because Operator's 
actual CPST rate  of $12.15, effective January  4, 1994 (the 
date  the   first  valid   complaint  was  filed   with  the 
Commission) through May 14, 1994, exceeds its MPR of $10.90, 
we  find Operator's  actual CPST  rate of  $12.15, effective 
January 4, 1994 through May 14, 1994, to be unreasonable.

     7.   Upon review  of Operator's FCC Form  1220, we find 
Operator's actual CPST rates  to be reasonable beginning May 
15,  1994.  Finally,  we  calculate a  refund  plan for  the 
refund liability period addressed  in this Order as follows: 
For the period from January 4, 1994 through May 14, 1994, we 
calculate an  overcharge of $1.25 per  month per subscriber.  
Our total calculation, including interest through August 31, 
2002, equals  $19,091.12.  Our calculation does  not include 
franchise  fees.  We  will  order Operator  to  refund  this 
amount, plus any additional interest  accrued to the date of 
refund, plus  franchise fees,  if any,  and interest  on the 
franchise  fee principal  amount,  to  its CPST  subscribers 
within 60 days of the release of this Order.

     8.   Accordingly,  IT IS  ORDERED, pursuant  to Section 
1.106 of the Commission's rules, 47 C.F.R.  1.106, that the 
petition for reconsideration filed by Operator is GRANTED IN 
PART AND DENIED IN PART TO THE EXTENT INDICATED HEREIN.

     9.   IT IS FURTHER ORDERED,  pursuant to Sections 0.111 
and 0.311 of the Commission's  rules, 47 C.F.R.  0.111 and 
0.311, that In The Matter of Suburban Cable TV Co., Inc., DA 
95-1227,  10 FCC  Rcd 6495  (CSB  1995) IS  MODIFIED TO  THE 
EXTENT INDICATED HEREIN.

     10.  IT IS FURTHER ORDERED,  pursuant to Sections 0.111 
and 0.311 of the Commission's  rules, 47 C.F.R.  0.111 and 
0.311,  that  the  stay  of Order  DA  95-1227,  granted  in 
Petitions for Stay  of Action, DA 95-1795, 10  FCC Rcd 10591 
(CSB 1995), IS VACATED.

     11.   IT IS FURTHER ORDERED, pursuant to Sections 0.111 
and 0.311 of the Commission's  rules, 47 C.F.R.  0.111 and 
0.311,  that the  CPST  rates, charged  by  Operator in  the 
community  referenced above,  beginning  May  15, 1994,  ARE 
REASONABLE.

     12.  IT IS FURTHER ORDERED, pursuant to Sections 0.111, 
0.311 and  76.962 of  the Commission's  rules, 47  C.F.R.  
0.111,  0.311, and  76.962,  that Operator  shall refund  to 
subscribers in the franchise area referenced above the total 
amount of $19,091.12, plus interest accruing from August 31, 
2002 to the date of refund, plus franchise fees, if any, and 
interest  on the  franchise fee  principal amount  within 60 
days of the release of this Order.

     13.  IT IS FURTHER ORDERED, pursuant to Sections 0.111, 
0.311 and  76.962 of  the Commission's  rules, 47  C.F.R.  
0.111, 0.311,  and 76.962, that Operator  file a certificate 
of compliance with the  Chief, Enforcement Bureau, within 90 
days of the release of  this Order certifying its compliance 
with this Order.

     
                              FEDERAL COMMUNICATIONS 
COMMISSION 



                              David H. Solomon
                              Chief, Enforcement Bureau
                         
_________________________

1  Effective  March  25, 2002,  the  Commission  transferred 
responsibility for resolving cable programming services tier 
rate complaints from the former Cable Services Bureau to the 
Enforcement Bureau.  See Establishment  of the Media Bureau, 
the  Wireline  Competition  Bureau   and  the  Consumer  and 
Governmental   Affairs   Bureau,   Reorganization   of   the 
International Bureau  and Other Organizational  Changes, FCC 
02-10, 17 FCC Rcd 4672 (2002).
2  See In The Matter of  Suburban Cable TV Co., Inc., DA 95-
1227, 10 FCC Rcd 6495 (CSB 1995). 
3  The term  "Operator" includes  Operator's successors  and 
predecessors in interest.
4 See Petitions  for Stay of Action, DA 95-1795,  10 FCC Rcd 
10591 (CSB 1995).
5 Prior Order at n. 1.
6 47 U.S.C. 543(c) (1996).
7 Pub. L. No. 102-385, 106 Stat. 1460 (1992).
8 Pub. L. No. 104-104, 110 Stat. 56 (1996).  
9 See Implementation  of Cable Act Reform  Provisions of the 
Telecommunications Act of 1996, 11 FCC Rcd 5937 1996).
10 See Section  76.956 of the Commission's  rules, 47 C.F.R. 
76.956.
11 See Section  76.957 of the Commission's  rules, 47 C.F.R. 
76.957.
12 See  Implementation of  Sections of the  Cable Television 
Consumer  Protection  and  Competition  Act  of  1992:  Rate 
Regulation,  8  FCC  Rcd  5631,  5755-56,  5766-67,  5881-83 
(1993). 
13 See  Implementation of  Sections of the  Cable Television 
Consumer  Protection  and  Competition  Act  of  1992:  Rate 
Regulation, 9 FCC Rcd 4119 (1994).
14 See Section 76.922 of the Commission's rules, 47 C.F.R.  
76.922.
15 Id.
16   See Section  76.922(l)  of the  Commission's Rules,  47 
C.F.R. 76.922(l).  See also, Second Report and Order, First 
Order  on Reconsideration,  and Further  Notice of  Proposed 
Rulemaking, MM  Docket No. 93?215  and CS Docket  No. 94?28, 
FCC 95?502, 11 FCC Rcd 2220 (1996).
17  The Commission made clear that the fact that an operator 
has incurred costs does  not necessarily establish its right 
to recover those costs from subscribers.  See Implementation 
of Sections of the  Cable Television Consumer Protection and 
Competition Act of 1992: Rate  Regulation, MM Docket No. 92-
266,  Report  and  Order  and  Further  Notice  of  Proposed 
Rulemaking, 8 FCC Rcd 5631, 5794 at n. 619 (1993).
18 In the Matter of Suburban  Cable TV, Inc., DA 97-2032, 13 
FCC  Rcd 13111  (CSB  1997).   See also,  In  the Matter  of 
Charter Communications,  DA 02-637  (CSB released  March 20, 
2002).
19 In the Matter of Cencom Cable Income Partners II, LP, FCC 
97-205, 12 FCC Rcd 7948 at  11 (1997).
20 These findings are based solely on the representations of 
Operator.   Should information  come to  our attention  that 
these representations were materially inaccurate, we reserve 
the right to take appropriate  action.  This Order is not to 
be construed as  a finding that we have  accepted as correct 
any  specific entry,  explanation  or argument  made by  any 
party to this proceeding  not specifically addressed herein.   
Information  regarding  the  specific  adjustments  made  to 
Operator's FCC  Forms can be  found in the public  files for 
the above-referenced  community which  are available  in the 
FCC  Reference  Information  Center, Portals  II,  445  12th 
Street,  SW,  Room  CY-A257, Washington,  DC,  20554.   This 
document  may  also  be   purchased  from  the  Commission's 
duplicating  contractor, Qualex  International, Portals  II, 
445 12th  Street, SW,  Room CY-B402, Washington,  DC, 20554, 
telephone  202-863-2893, facsimile  202-863-2898, or  via e-
mail qualexint@aol.com.